Health & Welfare Plans Newsletter

BULLETIN
June 8, 2020

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[Official Guidance]

Text of IRS Notice 2020-44: Sections 4375 and 4376 -- Insured and Self-Insured Health Plans Adjusted Applicable Dollar Amount for PCORI Fee (PDF)

"The fee imposed by Sections 4375 and 4376 helps to fund the Patient-Centered Outcomes Research Trust Fund (PCORTF) and is calculated using the average number of lives covered under the policy or plan and the applicable dollar amount for that policy year or plan year....

"Prior to [the December 20, 2019 enactment of the Further Consolidated Appropriations Act, 2020, (the Act)], due to the anticipated termination of the fee under Section 4375 for policy years ending after September 30, 2019, issuers of specified health insurance policies for policy years ending on or after October 1, 2019, and before October 1, 2020, may not have anticipated the need to identify the number of covered lives for this period. Issuers may continue to use one of the following four methods specified in the regulations under Section 4375 to calculate the average number of covered lives for purposes of the fee imposed by Section 4375: the actual count method, the snapshot method, the member months method, and the state form method....

"Similarly, prior to enactment of the Act, due to the anticipated termination of the fee under Section 4376 for plan years ending after September 30, 2019, plan sponsors of applicable self-insured health plans for plan years ending on or after October 1, 2019, and before October 1, 2020, may not have anticipated the need to identify the number of covered lives for this period. Plan sponsors may continue to use one of the following three methods specified in the regulations under Section 4376 to calculate the average number of covered lives for purposes of the fee imposed by Section 4376: the actual count method, the snapshot method, and the Form 5500 method....

"The applicable dollar amount that must be used to calculate the fee imposed by Sections 4375 and 4376 for policy years and plan years that end on or after October 1, 2019, and before October 1, 2020, is $2.54....

"This notice is effective for policy years and plan years ending on or after October 1, 2019."

Internal Revenue Service [IRS]

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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